Common use of Limitations on Manager Clause in Contracts

Limitations on Manager. During the Term and any renewal thereof, Manager agrees that: (A) Manager shall not permit wagering activities to be conducted at or in connection with the Hotel; (B) Manager shall not own, directly or indirectly (within the meaning of Section 856(d)(5) of the Internal Revenue Code of 1986, as amended (the "Code")), more than 35% of the shares of Equity Inns, Inc.; (C) No more than 35% of the total combined voting power of Manager's outstanding stock (or 35% of the total share of all classes of its outstanding stock) shall be owned, directly or indirectly, by one or more persons owning 35% or more of the outstanding stock of Equity Inns, Inc.; and (D) Manager (or a person who is a "related person" within the meaning of Section 856(d)(9)(F) of the Code (a "Related Person") with respect to the Manager shall be actively engaged in the trade or business of operating "qualified lodging facilities" (defined below) for one or more persons who are not Related Persons with respect to Equity Inns, Inc. or Lessee ("Unrelated Persons"). In order to meet this requirement, Manager agrees that it (or a Related Person with respect to Manager (i) shall derive at least 10% of both its revenue and profit from operating "qualified lodging facilities" for Unrelated Persons and (ii) shall comply with any regulations or other administrative guidance under Section 856(d)(9) of the Code with respect to the amount of hotel management business with Unrelated Persons that is necessary to qualify as an "eligible independent contractor" with the meaning of such Code Section.

Limitations on Manager. During the Term and any renewal thereof, Manager agrees that: (A) A. Manager shall not permit wagering activities to be conducted at or in connection with the Hotel; (B) B. Manager shall not own, directly or indirectly (within the meaning of Section 856(d)(5) of the Internal Revenue Code of 1986, as amended (the "Code")), more than 35% of the shares of Equity Inns, Inc.; (C) No C. no more than 35% of the total combined voting power of Manager's outstanding stock (or 35% of the total share of all classes of its outstanding stock) shall be owned, directly or indirectly, by one or more persons owning 35% or more of the outstanding stock of Equity Inns, Inc.; and (D) D. Manager (or a person who is a "related person" within the meaning of Section 856(d)(9)(F) of the Code (a "Related Person") with respect to the Manager shall be actively engaged in the trade or business of operating "qualified lodging facilities" (defined below) for one or more persons who are not Related Persons with respect to Equity Equit Inns, Inc. or Lessee Owner ("Unrelated Persons"). In order to meet this requirement, Manager agrees that it (or a Related Person with respect to Manager (i) shall derive at least 10% of both its revenue and profit from operating "qualified lodging facilities" for Unrelated Persons and (ii) shall comply with any regulations or other administrative guidance under Section 856(d)(9) of the Code with respect to the amount of hotel management business with Unrelated Persons that is necessary to qualify as an "eligible independent contractor" with the meaning of such Code Section.